Biden tries again on student debt cancellation.

Plus, how is Tangle (the business) going?

I’m Isaac Saul, and this is Tangle: an independent, nonpartisan, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”

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Today's read: 11 minutes.

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Quick hits.

1. The House of Representatives is expected to hold a floor vote today to determine the next speaker, with Rep. Jim Jordan (R-OH) the favorite to capture the gavel. (The updates)
2. President Biden will head to Israel today as a show of support, then travel to Amman, Jordan, to meet with Palestinian President Mahmoud Abbas, Egyptian President Abdel Fattah el-Sisi, and Jordan's King Abdullah II. (The trip) 
3. Russia returned four Ukrainian children to their families as part of a Qatar-negotiated deal. Ukraine has accused Russia of kidnapping more than 20,000 children during the war. (The swap) 
4. A federal judge in Washington, D.C., issued a gag order on President Trump, the second this year.Trump received a boost in fundraising afterward. (The order) 
5. Violent crime in the U.S. dropped last year but property crimes surged, according to data in the FBI's annual crime report. (The data)

Today's topic.

Student loans. Earlier this month, student loan repayment restarted for the first time in three years. Shortly thereafter, President Biden announced an additional $9 billion in student debt cancellation, a move that impacted roughly 125,000 borrowers. The administration says approximately 3.6 million Americans have now received $127 billion of student debt relief, and the Biden administration is now exploring other options for larger-scale cancellation.

In Biden’s original plan, borrowers who made under $125,000 (or $250,000 as a couple) would have qualified for up to $20,000 in relief if they had received a Pell Grant and up to $10,000 if they had not. The plan would have canceled $400 billion of debt and impacted nearly 43 million American borrowers. Biden tried to justify the move by citing the HEROES Act of 2003, which was designed to grant relief to student loan recipients in connection with a war, military operation or national emergency. However, the Supreme Court ruled that Biden’s justification exceeded his authority.

Biden has since directed the Education Department to find another path for debt cancellation. Now, the administration is exploring options through the Higher Education Act in meetings known as "negotiated rule-making," which the Education Department regularly holds to gather input from people outside the government. Similar to the HEROES Act, the Higher Education Act grants authority to the Secretary of Education to waive or release student loans. However, the same question remains of how far that authority extends.

With student loan repayments restarting this month, some economists have suggested the payment resumption will cause a drag on the economy. Biden is trying to avoid such a downturn and fulfill a campaign promise to young Americans that he would cancel some of their student loans.

Today, we are going to take a look at some reactions from the left and right to the latest on student loans, then my take.

What the left is saying.

• The left thinks Biden and Democrats still need to do more to offer relief to borrowers, but their solutions vary. 
• Some propose targeted relief for those who were most impacted by the pandemic or usurious loan programs.
• Others say the responsibility falls on Congress to take aim at the worst elements of the federal student loan system. 

In the New York Times, Yarimar Bonilla wondered “what pain will a new wave of student loan payments bring?”

Loan payments are resuming “at a time when the cost of living has risen sharply, interest rates are higher than they’ve been in years and the average American household is carrying an estimated $10,000 in credit card debt,” Bonilla said. The Biden administration “can craft more robust changes that could affect student loan borrowers now and into the future, even if those changes could take months, if not years, to hammer out. But the new effort no longer addresses the unfair burdens of the pandemic. For workers who lost wages, the pandemic has introduced the economic equivalent of long Covid: They haven’t recovered from the financially devastating blows of this virus.”

“A targeted relief program focused on those who lost their savings in the pandemic could help people… get back on track. More effectively regulating interest rates, offering relief to those who have overpaid because of compounded interest and developing a program similar to Public Service Loan Forgiveness to address pandemic debt would be crucial steps forward. The Biden administration has already started to quietly reform the student loan system by creating an income-driven repayment plan, canceling the debt of people who went to predatory colleges and expanding the Public Service Loan Forgiveness program. But we need more than reform; we need a true transformation.”

In MSNBC, Eleni Schirmer said “if Biden can cancel some student debt, he can cancel all of it.”

“The president still has the power to cancel student debt — swiftly, completely and for everyone,” Schirmer wrote. “While Biden is showing his willingness to pursue cancellation, the effort needs considerably more gas… Canceling student debt is perfectly legal and urgently needed. These adjustments all depend upon the Higher Education Act, which lets the secretary of education modify, ‘compromise, waive or release’ existing debt. But there is nothing in that law that delimits either the volume or velocity of cancellation.”

“If Biden can cancel a corner of the debt, then he can cancel it all. Because the president has not gone this route though, student debtors are facing their first loan payments in three years. The Department of Education has attempted to soften the blow by revising repayment plan options, supposedly helping borrowers lower their monthly payments, but many borrowers are reporting that their payments have instead skyrocketed. Many student debtors are feeling left high and dry,” Schirmer said. The president has promised them an alternative. “Now, it’s time to fight for it.”

For Inside Higher Ed, Rep. Joe Courtney (D-CT) made the case for a bill that would eliminate interest on federal student loans. 

“With the reactivation of debt collection on a portfolio of $1.7 trillion for 43 million borrowers, there are many reasons for Congress, on a bipartisan basis, to reduce the consequences this will have at both the macroeconomic level for the country and the micro level for borrowers and their families. Paying the bill for that amount of debt will significantly stress borrowers’ budgets, and the fallout will ripple beyond just the plight of those 43 million Americans. Ask any real estate agent, and they will tell you student loan debt is one of the biggest barriers for new home buyers.”

“In July, I introduced the Student Loan Interest Elimination Act alongside Senator Peter Welch and 23 House co-sponsors. The bill would virtually eliminate interest on federal student loans for current and future borrowers,” Courtney wrote. “Here’s how it works: rather than having borrowers’ principal and interest payments deposited in the U.S. Treasury General Fund, the borrowers’ principal-only payments would be deposited in a revolving trust fund, where they would be invested in low-risk securities. The gains on those investments would be used to defray the costs of the student loan program, thus avoiding a negative impact on the federal deficit. Such a mechanism is used today to fund the National Railroad Retirement program, whose solvency was recently certified for the next 25 years.”

What the right is saying.

• The right is opposed to any additional relief for borrowers and thinks student loan repayments should resume in full. 
• Some say Biden continues to pursue loan forgiveness programs for his political benefit at the expense of taxpayers.
• Others suggest colleges should bear some of the financial burden of the country’s student debt crisis. 

In National Review, Robert S. Eitel and Paul Zimmerman criticized the Biden administration’s “zombie student-loan bailout” efforts. 

“Biden’s Department of Education has announced a new rulemaking committee to search for new ways to appease the Left’s demand for a massive student-loan-debt bailout… The department’s appointments of negotiators to its ‘Student Loan Relief Committee’ show that the fix is in,” Eitel and Zimmerman said. “The 14-member committee includes four student representatives (three student-loan borrowers and one currently enrolled student), one of whom has demanded cancellation of all student debt and tweeted about the ‘generational trauma caused by student loans.’”

“Notably absent from the committee’s membership are representatives of organizations that advocate for the very people who will have to pay for the bailout: taxpayers. This snub is an admission that the administration is not concerned about the cost of its debt forgiveness and doesn’t want the discussions to deal with the unfairness inherent in forcing people who never attended college or who paid off their student loans to underwrite the debts of others,” they said. “The administration is making the mistake of gravely underestimating the common sense of the average American, who can identify an illegal and unfair policy when he sees one.”

In the Daily Caller, Andrew Wilford called the Biden administration’s messaging on student loan repayments “outrageous.”

“Even as student loan payments were finally allowed to resume after more than three years, the Biden administration recently announced yet another $9 billion in student loan forgiveness. For taxpayers concerned about how a total of $204 billion in loan forgiveness under President Biden will affect the out-of-control national debt, fear not — apparently it benefits everybody and hurts nobody!” Wilford wrote. “That’s a very hard claim to take seriously. While the White House claims that it has forgiven $127 billion in student loan debt, the Committee for a Responsible Federal Budget (CRFB) estimates that the total cost is $204 billion (including the $9 billion in additional forgiveness). Factoring in $69 billion in additional interest obligations, that brings the total cost to taxpayers to $273 billion.”

“The idea that student loan forgiveness ‘grows the economy’ and ‘benefits everybody’ is also highly questionable. Throughout the pause on student loan repayments, the majority of the benefit has clearly gone primarily to Americans who took out big loans to pursue lucrative careers. CRFB estimates that 70 percent of student loan debt is held by just a quarter of borrowers — borrowers who benefit most from student loan repayment pauses because they often have high interest rates.”

In USA Today, Inez Stepman argued the government should “tax universities — not the rest of us — to deliver loan forgiveness to struggling students.”

“The resumption of student loan payments after a long pandemic hiatus will worsen household finances for many families already stretched thin or spending on credit due to inflation and the generally poor economic outlook. But asking the majority of Americans without college degrees, or those who sacrificed for decades to pay off expensive loans, to bail out the current debtors is an unfair solution that doesn’t solve the problem going forward. Instead, we should ask the universities that have benefited from student loan programs to foot their fair share of debt forgiveness.”

“Investing in higher education was supposed to make it easier for bright kids from impoverished backgrounds to launch themselves into their American Dreams. Instead, 60 years of huge benefits to universities have resulted in a smaller proportion of students from the lower half of the income spectrum on campus, not larger. Universities have used taxpayer generosity instead to become the ideological gatekeepers of the professional class, credentialing an army of cultural revolutionaries who make our country neither wealthier nor wiser,” Stepman said. “Now that the bill for these decades of degree largesse has come due, it should be dropped firmly at the university door, and not at taxpayers’.”

My take.

Reminder: "My take" is a section where I give myself space to share my own personal opinion. If you have feedback, criticism, or compliments, don't unsubscribe. Write in by replying to this email, or leave a comment.

• Biden should celebrate what he has done and move on.
• I don't think this is a good time for massive student debt relief.
• None of this will help future borrowers if we don't actually reduce the cost of college.

As the kids say, I think it's time for Biden to "take the L."

Throughout the debate on student debt relief, I've held four pretty consistent positions. Nothing that has happened recently has changed them significantly:

1) Student debt relief can be a good economic stimulus. I think there was justification to pause debt repayments during the pandemic, when so many people were initially out of work and our economy was sputtering. But at a time when we have high inflation and low unemployment, I don't think student debt relief is a useful macroeconomic tool.

2) Targeted student debt relief is a worthy cause. It's true that most student debt is held by the upper and middle class, but lower-income Americans hold a significant portion and could very much benefit from debt relief. Plenty of middle- and lower-income Americans were duped into predatory loans with insurmountably high interest rates, or entered the workforce shortly after the 2008 recession, and have been fighting an uphill battle against crushing debt. The good news there is that Biden has already executed targeted student debt relief — $127 billion worth!

3) It seemed obvious to me that Biden did not have the authority to cancel student debt under the HEROES Act, but the question was always whether conservatives would be able to find a plaintiff to challenge the justification. Once they did, I suspected the court would strike it down, and they did not disappoint. We haven't seen a new plan, but as a very general rule, I would not expect this court to allow an administrative agency like the Education Department to implement a massive economic policy without the input of Congress.

4) Even if Biden were to cancel billions more of student debt for tens of millions of borrowers, that wouldn't do anything for the new generations of borrowers entering the workforce now — borrowers who are also incurring absurd amounts of debt as the cost of college continues to go up. In fact, debt cancellation could make their problems worse. What if new borrowers see this forgiveness and assume they can take out as many loans as possible without worrying about paying them off? The hard reality for the future is that no amount of debt cancellation will matter if we don't actually reduce the cost of college.

Many of my friends are buried in student loan debt, and I've heard innumerable stories about how much relief did (or would) help them. I don't doubt for a minute that a lot of people would benefit personally from debt cancellation, and if that is your only bar for policy then debt relief passes muster. But it gets a lot more complicated when you consider who would pay for the forgiveness and whether it would actually help Americans climb out of debt over the long term, especially students who are taking on the same kind of obligations right now.

Biden has both already lost this battle in court and managed to do a pretty good job of actually getting billions of dollars in debt relief to millions of Americans. I think it's time for him to sell what he's accomplished to the public and move on.

Your questions, answered.

Q: How is Tangle doing as a business? I don't need the numbers, but I know there was some hesitancy to add advertisements to the newsletter and I am curious how that has panned out. Any sneak-peeks as to what is next for Tangle?

— Logan from San Jose, CA

Tangle: The short answer is that things are going really, really well. And I’m happy and proud to share the numbers (in fact, transparency about our business model and what we’re building is one of the core tenets of what I set out to do).

When I first started Tangle, my goal was for the newsletter to bring in $60,000 a year so I could have a salary and work for myself. This week, after all the attention from our coverage on the Israel-Palestine conflict, we broke the 12,000 paying subscribers threshold and are now bringing in over $600,000 per year in annual recurring revenue from subscriptions.

The advertising business has added about $5,000 per month in revenue, so on one hand it’s a small part of our business. On the other hand, that's $60,000 per year, which is a salary – and what I set out to make for myself when this thing started four years ago. It's pretty amazing, and very few people seem to be bothered by the advertisements, so it has gone much more smoothly than I initially feared.

As a result of all this, I've been able to invest in Tangle like never before. For the first time ever I now have a real team — four employees — and my first hire, Magdalena, is now running all of our social media and our advertising business. Ari, who was a part-time editor and contributor for a while, is now our full-time managing editor. We hired Jon to launch our YouTube channel and edit podcasts. And most recently we brought on Will, who does research and editing as well as running all our communications and booking. And, of course, we still have part-time editors like my dad (my first editor), Sean (our copy editor), Zosha (who tags in as a podcast editor here and there), and a rotating group of interns (right now Daniel is our social media intern). To think we have nine people on this project is frankly incredible.

What's next? First, I want to keep growing our audience. 77,000 newsletter subscribers is amazing, but we’re still competing with network news outlets and their millions of viewers. Going forward, we are planning to invest heavily in growing our mailing list, podcast, and YouTube channel. To do this, I’m going to give our team members more face time (so it isn't just me), as well as invest more in short-form and long-form videos. We held our first live event, which was a smashing success, and I’m planning to do that again. I want to do more interviews, too. Also, I’m planning to open the door to large donations, as we have received a lot of interest from people who want to support our work with grants and impact funding (if you or an organization you work for might be interested in supporting us, shoot me an email).

Second, we are redesigning our website and will be announcing a new Sunday newsletter product, which we are very excited about. I can't say more than that right now, but I think we've got some incredible new content ideas in the pipeline — and they are coming soon.

Finally, we’re going to keep focusing on what we’re already doing. I have no plans to build a huge, 1,000-person newsroom. When I set out on this journey, I really just wanted a place to write freely and honestly. I wanted to build something my liberal and conservative friends could all trust. And today, I’m more mission-oriented than ever. I’ve seen the impact of our work and the feedback from readers, and I believe strongly that what we are doing is good for the country and good for people’s brains. So Tangle will continue to maintain a small, nimble, tight-knit, well-paid team that is fully dedicated to our mission of bringing trust back to the news and getting people out of their bubbles.

I'd be remiss not to mention that Tangle members get updates on the business once or twice a year — so if you ever want a consistent behind-the-scenes look at our business, or you want to unlock Friday editions, or you don’t want to see ads, or you just want to just support our work, you can become a member.

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Under the radar.

Supreme Court Justice Amy Coney Barrett said on Monday that she favored the idea of an ethics code for the Supreme Court, adding a Republican-appointed justice to the growing chorus of justices who have publicly backed the suggestion. “It would be a good idea for us to do it, particularly so that we can communicate to the public exactly what it is that we are doing in a clearer way,” she said in an interview at the University of Minnesota Law School. Following stories about Supreme Court Justices Samuel Alito and Clarence Thomas partaking in lavish vacations alongside major Republican donors, there have been increased levels of pressure for the court to adopt an ethics code from the public, especially from the left. The New York Times has the story.

Numbers.

• $503. The average monthly student loan payment, according to estimates from the Education Data Initiative.
• $393. The average student loan payment in 2016. 
• $227. The average student loan payment in 2005, equivalent to $361 when adjusted for inflation. 
• 20 years. The time it takes the average borrower to repay their student loans.
• $27,000. The interest that accrues on an average student loan over 20 years at the rounded average interest rate of 6%.
• 92%. The percentage of student loan debt in the U.S. that is owned by the federal government. The remaining amount is owned by private lenders.
• $619 billion. The total student loan debt in the U.S. in Q1 2008. 
• $1.77 trillion. The total student loan debt in the U.S. in Q1 2023. 
• 40.4 million. The number of student loan borrowers who left school without completing a degree, as of 2021.

The extras.

• One year ago today we covered last September's inflation numbers.
• The most clicked link in yesterday's newsletter was Senator Graham (R-SC) saying about Gaza to "level the place."
• Pro-protest: 1,052 Tangle readers responded to our poll asking their opinion about protests supporting Hamas, with 79% saying they oppose the protests, but support the protestors' rights. 12% said they oppose the protests and believe protestors should face repercussions, 7% were ambivalent, and 2% supported and agreed with the protests. "Many pro-Palestinian protests are being equated with pro-Hamas which is NOT the same thing and should never be considered the same thing. I support pro-Palestinian protests and condemn pro-Hamas protests," one respondent said.
• Nothing to do with politics: Why is the night sky dark?
• Take the poll. What do you think about the Biden administration's response to student debt? Let us know! 

Have a nice day.

Griffith University's Olaf Meynecke, from the Coastal and Marine Research Centre and Manager of the Whales and Climate Program in Australia, is an expert in baleen (filter-feeding) whales. According to a new study from Dr. Meynecke, humpback and other baleen whales in different populations across the northern and southern hemispheres appear to roll around and 'play' with clumps of kelp and seaweed at the water's surface. The research, published in the Journal of Marine Science and Engineering, emphasizes that the behavior can be observed in different individuals in different parts of the world. Though the behavior may also have sanitary benefits, the ‘kelping’ could also indicate an under-appreciated playful side of the largest mammals in the world. Science Direct has the story.

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